The Vow

Friday, September 13, 2013

Facebook launched its virtual currency Credits in June 2011 to simplify payments. In reality, Credits caused headaches for international payments due to fluctuating exchange rates. But last night, the sun set on Credits and Facebook completed its transition to local currency payments. It will help developers and Facebook make more money, smooth payments, and solidify Facebook as an international app platform.
The logic behind Credits looked good on paper. Facebook wanted to start earning a 30% cut on purchases made in games played on its website like Apple and Google earn on iOS and Android in-app sales, so it needed a standardized payments system. But rather than have people buy things in their local currency, Facebook launched Credits — an intermediary virtual currency that cost $0.10 each that could then be spent on virtual goods or game-specific currency.
If it sounds like a bit of a rigmarole, it was, but there were some benefits. First, users didn’t have to transact with game companies directly. They could rely on Facebook’s security and brand name rather than sending money straight to small developer shops they might not have heard of.
Credits also leveled the playing field between developers. Rather than say buying proprietary virtual currency from Zynga that you could only use in its games, you’d buy Credits that were more liquid and could be used in any game. The idea was that this would help small developers get more paying players and prevent users from getting their money stuck in specific games.
This worked pretty well when Facebook’s developer and user base was more concentrated in the United States, but since 2011 Facebook has seen huge growth overseas in both categories. That meant serious problems for pricing goods within games.
Let’s say you price a virtual cow for 20 Credits. In the US that comes out to a nice, round $2. But that’s 63.29 Thai bhat. If the exchange rate changes, so do the actual prices of all your goods when they’re sold internationally. This caused confusion for users who thought the devs were hiking prices or putting things on sale, which may have caused purchase hesitation and conversion rate decreases. And since developers had to set the same price for the whole world, a 30 Credit power-up might seem moderately priced in the UK, but too expensive for a gamer in Vietnam.
In the end, the international payment problems outweighed the pros of Credits. Facebook’s payments team leader Deb Liu tells me “Most users were actually spending in one game or a couple of games. Local currency payments were benefiting [developers] more than using Credits.”
So Facebook announced in March that it would be transitioning from Credits to local currency payments. This lets developers price their goods dynamically in different regions around the world. When users see something they want to buy in a game, they just click “Buy” and Facebook lets them pay with a credit card, PayPal, mobile payment system like Zong, gift card, or other method.
Liu says “We put a bunch of work in to speed up the call back and reduce latency and make it faster to render the payment flow, and make the purchase.” That means games run faster, and payments go through faster. And don’t worry, if you had previously bought Credits, they’ve been converted into balance you can spend from.
Overall, local currency payments have some big advantages:
Rather than having to go through the process of buying Credits, users just buy the goods they want directly. Eliminating that step could increase purchase frequency.
There’s no extra mental jump required to figure out how much goods costs. Instead of being obscured through Credits, users see prices in the actual amount of local currency they’ll pay. Less thinking, more buying.
Developers can price virtual goods based on the buying power of the local population. High prices in first-world markets, lower prices in developing markets. This lets developers maximize purchases while making their goods accessible to everyone.
And since Facebook earns a 30% cut on each of these purchases, the more people buy in third-party games, the more it earns.
Perhaps the only downside to the switch was asking developers to do extra work to transition. Facebook had extolled the virtues of Credits for years, then seemed to suddenly flip-flop. Facebook’s already known as a bit of an unstable platform to build on, where viral channels and features change quickly, and killing off Credits only exacerbates that perception. Still, the move was necessary if Facebook wanted to keep growing its payments revenue, which hit $214 million during Q2 2013.
Long-term, local currency payments could also pave the way for something really big: the ability to buy real things around the Internet through Facebook. Last month Facebook began a test with ecommerce app JackThreads where you could ‘pay with Facebook”.
Essentially, you’d authenticate with your Facebook email address and password, and the social network would auto-fill your credit card and billing information to speed up the purchase process. Your payment would still be processed through PayPal or whatever processor a third-party ecommerce app chose, but Facebook would help mobile reduce typing. In exchange, it got to see if your purchase stemmed from a click on an ad on Facebook, which helps it prove return on investment to advertisers and get them to buy bigger campaigns.
Credits made some sense for games, but if Facebook wants to get into real commerce, local currency is the way to go. And with CEO Mark Zuckerberg saying Facebook’s mission is now to connect the 5 billion people without Internet, and most of its user growth is coming from places like Brazil and India, the sunset of Credits could mean a new dawn for Facebook commerce around the world.

Technology makes it easy to turn the minutiae of our daily lives into useful data sets, but sometimes it feels bleak seeing every experience or memory broken down into pie charts and bar graphs. mem:o is a unique visualization tool that takes life-logging beyond spreadsheets by transforming data into striking images influenced by Dutch graphic design. The iPad app is free for download and includes two boards, with the option of adding more boards via an in-app purchase.
Developers Caroline Oh and Young Sang Cho, the duo behind studio c+y, say the app’s look was inspired by the bold shapes and playful colors of graphic design influenced by Werkplaats Typografie (Typography Workshop), a masters program run by the ArtEZ Institute of the Arts in the Netherlands. mem:o uses a font called Brown that was created by Swiss designer Aurèle Sack to be especially legible. But mem:o isn’t targeted at design nerds only. The app stands apart because of its streamlined functionality and the easy-to-understand charts it creates.
“With personal data, you are generally looking to pick up on habits and trends, rather than execute complex calculations. Our goal for mem:o was to allow the user to easily see these kinds of relationships without getting lost in extraneous complexity,” Oh and Cho told me in an email.
To create a chart, all you need to do is chose a color palette from seven options and start entering your data. Each chart gives you the option of adding a unit (dollars, hours, minutes, miles, yards or feet), the date and time for each entry, as well as tags and a brief text note. You can see your data sets in board or calendar views. I found the latter option especially helpful for tracking my daily calories, exercise and weight, and seeing at a glance how the three things are related, but mem:o’s developers hope its users will enjoy finding unexpected correlations between their personal data. The app’s home screen was designed to be “somewhat chaotic,” with unrelated boards juxtaposed.
“Before we had mem:o, this is how we often encountered our notes and numbers as we jotted in notebooks,” said the duo. “These kinds of ‘accidents’ should have a presence in the digital world as well.”
Before creating mem:o, Oh and Cho collaborated on the design and software development of several large-scale interactive museum exhibits. Based in New York City, multidisciplinary designer and educator Oh is the co-founder of TKOH, a studio that is currently developing a Web and tablet platform for recording oral histories. Young is a software developer, designer and animator, as well as a director of Seoul-based studio Byul & Associates.
After working together on projects that displayed static content, Oh and Cho said they wanted to create an open-ended tool that could be used in different ways and had an interface design that was different from iOS defaults. The two thought about developing a note or list-making app, but realized playing with quantitative values would give them more design possibilities. mem:o was created to break away from standard formats of visualizing data, such as the aforementioned pie charts and bar graphs, and their association with office cubicles and PowerPoint presentations.
Oh and Cho are planning several additions to the self-funded app, including an expanded color palette and export options such as PDF files, but say they will make sure none of these new features take away from mem:o’s simplicity. An upcoming iPhone app will offer complementary features instead of being a shrunken down version of the iPad app.

Chris Kemp, a former NASA CTO is stepping down as CEO of Nebula, the company he founded to provide hardware and software systems for building OpenStack cloud services. Kemp will become the company’s chief strategy officer and continue to serve as a member of the Nebula board of directors.
Gordon Stitt will replace Kemp as CEO starting September 23. Stitt is a veteran technology executive. He co-founded of Extreme Networks, now a publicly traded company.
Kemp is one of the more well-recognized executives in the cloud world. He is one of the co-founders of OpenStack, the open cloud initiative. He founded Nebula with much fanfare at OSCON in 2011. At the time he talked about how his company will revolutionize computing for decades to come. Two years later, the company launched Nebula One, the company’s “Cloud Controller,” a hardware appliance that turns server racks into a scalable on-premise system that combines compute, storage and networking into one machine.
Nebula is growing, Kemp says. But with that in consideration, questions inevitably surface why the company needs a change in leadership. Kemp said simply that Stitt has the experience for the job.
Kemp’s switch is illustrative of a transition at Nebula. But the change in roles is not so unusual. Founding CEOs often become strategists for the companies they start, leaving the job as CEO to someone with more experience.
Cloudscaling and Piston Cloud have both had changed in leadership with the CEOs both remaining as founding executives of the team. Both companies are also startups in the OpenStack ecosystem. Neither of these companies are showing tremendous growth and the same seems evident with Nebula.
The question, overall, has to be about OpenStack and its own ability to scale. If it can become a universal cloud infrastructure than Nebula, Piston and Cloudscaling has an opportunity to grow considerably. If it does not then a company like Nebula will need to adapt to the demands of the market.

Seenth.is lets music fans hone their obsession by making it easy for them to track the most interesting social media updates from their favorite performers. The iOS app (an Android version will be released later this year) aggregates and filters content from sources including Instagram, Twitter, YouTube and SoundCloud accounts of musicians and fans and presents items based on relevancy rather than chronological order, so you can see which items are likely to go viral before they do.
The Stockholm-based co-founders of Seenth.is (pronounced “seen this”) designed its algorithm to “solve the social media information overload that’s plaguing all of us,” said CMO Robert Furelid. The app soft-launched with 200 artists at the beginning of July and has grown quickly since then, with 400 additional performers added so far based on trending searches.
The idea behind Seenth.is was hatched when co-founder and head of business development Jesper Benon wanted to find concert reviews for electronic dance music trio Swedish House Mafia. While scrolling through comments left by thousands of fans on various sites, Benon began conceptualizing an app that would aggregate and sort through similar information for different artists. Seenth.is is based on tech Benon and CEO Marcus Myrberg developed for a company that provides social media monitoring services for public relation firms and other clients.
Seenth.ith’s creators intend for it to serve as a “second screen” experience to concerts or streaming music players like Spotify or Rdio. By helping its users sort through a mass of tweets, videos, photos, news articles and blog posts to find the most topical content about their favorite acts, Seenth.is hopes to stand out from other music discovery services including app Soundwave, location-based concert app Timbre or musician profile Web site BandPage.
Seenth.is currently has three main features. The Artist Feed gathers together all the different social media channels used by one performer or group, while the Fan Feed aggregates and filters online chatter from their listeners. Real-time updates from concerts appear in the Live Feed. The Explore window adds a discovery element by recommending new acts based on the genres and artists you have followed. You can save items from different feeds by starring it. Seenth.is’ next update will include a new feed that collects all your starred content in one feed and a more intuitive Explore window.
Furelid says the Seenth.is team is currently focusing on expanding the app’s roster of artists and cementing collaborations with musicians and DJs (he can’t disclose partners yet, but says fans can probably guess by following the app’s Facebook and Twitter feeds). Seenth.is is currently bootstrapped and has already launched its monetization model, which inserts ads into feeds and allows artists to participate in a revenue-sharing model.

Intel has quietly made another international acquisition in its push into artificial intelligence technology: it has bought Indisys, a Spanish startup focused on naturual language recognition. The terms of the deal have not been disclosed, but it is reportedly “north” of €20 million ($26 million). It comes just two months after news broke that Intel acquired Omek, an Israeli maker of gesture-based interfaces, reportedly for about $40 million.
We have reached out to Intel for direct confirmation of the deal and to ask about the price and further specifics: for now, there have been press reports (in Spanish, example) and a news release from Inveready, one of the Indisys’ early investors. Update: Inveready appears to have taken the news release down after I published this story. That release had noted that Pilar Manchon, CEO of Indisys, has already moved to Santa Clara to work in Intel’s R&D department, and that the company had employed 20 people prior to the exit.
(Inveready, who declined to comment for this story, has a track record with Spanish startup exits: it was also a backer of PasswordBank, acquired by Symantec for $25 million.)
Indisys has been in operation since 2003, and that last funding injection was specifically to help build out its business into international markets.
Based in Seville, Indisys’ dialogue-based systems have been used by Spanish companies like the retailing giant El Corte Ingles, insurance group Mapfre and the banking giant BBVA, across multiple platforms like web and mobile.
Indisys is a developer of natural language recognition technology, but also Siri-like intelligent assistant (IA) interfaces so that people can interact with it. Pictured here is “Maya,” one of its creations. Other clients like Boeing have been using Indisys’ technology for a project called Atlantis, to create interfaces to control unmanned vehicles.
While many of its reference customers are Spanish, the company says has developed multilingual technology. Indisys writes that its IA “is a human image, which converses fluently and with common sense in multiple languages ​​and also works in different platforms.”
As with Intel’s Omek acquisition, there are likely a couple of reasons behind the purchase of Indisys.
The first is that it is part of Intel larger moves into 3D visualization and “perceptual computing”, Intel’s term for gesture, touch, voice, and other artificial intelligence-style sensory technologies. This is also the focus of a $100 million investment fund Intel launched in April 2013.
The second is that voice recognition technology is being worked directly into Intel’s processor business.
Indeed, just earlier this week, Intel presented devices that showed off the company’s advances in gesture and natural language recognition business. While there has been speculation that Intel would license technology from companies like Nuance to build it into its own systems, the Indisys deal is an indication that Intel is getting more serious and wants to build and ultimately control this technology itself instead.
Intel was not a stranger to Indisys: its venture arm, Intel Capital, led a $5 million Series A investment into the company in November 2012, raising just over $6 million in total.
Given that Omek was also a portfolio company, it’s another sign of the tight integration between what Intel is doing on a strategic level as a business, and what it does on a VC level, something you can’t say for all corporate VC arms.

A little more than a year after Woot founder Matt Rutledge left the revolutionary daily deals company he sold to Amazon, he’s bringing the team back together to hack e-commerce once again. The new company, called “a mediocre corporation,” is being designed to build up and test out new ways of selling products to customers online.
Mediocre brings together a number of folks from the founding team behind Woot, the long-running e-commerce site that created the daily deals category of online commerce. That includes Matt’s brother Dave Rutledge, who served as the company’s creative lead, as well as lead developer Shawn Miller, both of whom left Amazon in May. Also joining them are former Woot CFO Derek Chapin and IT director Luke Duff.
“We really tried to lower expectations with the brand,” Rutledge told me. The team drew inspiration from Ev Williams and Biz Stone’s Obvious Corporation, but since “obvious” was taken, they decided to set the bar low with “mediocre” instead.
Launched in 2004, Woot made one item available for sale every day. The site started with consumer electronics — putting a limited number of TVs, PCs, and other items on sale for well below their usual price. It also garnered a following for selling a monthly “Bag of Crap” made up of leftover inventory and (sometimes) office supplies.
Over time, the offers improved and inventory began selling out in minutes. And before long, Woot began introducing new vertical categories with which it could make new items available. Then Woot hit the bigtime in 2010, as it was acquired by Amazon.com for $110 million.
The Amazon deal helped Woot to reach massive scale, but it also meant that some of the things that made it great (like focusing on one deal a day) began to fade away. As Amazon added more categories and items, the original reason to visit Woot — i.e. to find out what’s on sale and grab it quick — disappeared.
With that all behind them, the guys are ready to test out new models of selling goods online, through a series of “experiments” that the company will incubate through its “Mediocre Laboratories” division. Each of those experiments will have its own consumer-facing site, which will test out some hypothesis or online business model.
Structuring the operation that way will give Mediocre the ability to be nimble and try different things out — something that it wasn’t really able to do at Woot. Given the constraints of “one deal per day,” as well as the subdomain structure that it set up when it launched new categories, Woot didn’t give itself too much wiggle room to experiment.
This time things will be different. The company currently has about a dozen employees, with its headquarters in Dallas, and the team already has some ideas for what it wants to build. Rutledge wouldn’t give me a timeline for the first launch of an experiment or an estimate for how much time will be spent on each.
That said, what they do know is that they will be very transparent and seek input from the community — you know, the way Woot used to. The first thing that the company will build is a forum, where its customers and users will be able to make suggestions for things that it can build and provide feedback on experiments that are currently in progress. Back in the day, it was the sense of community that really set Woot apart. Well, that and the hilarious descriptions of the items it put up for sale. That creative touch will be back as well.
Regardless of what they might come up with, at least we know it’s not going to be boring.

Days by Wander launched back in May with a very difficult mission: to change the way you think about photo-sharing. While some think that pictures of your feet or coffee are too mundane for photo-sharing to Instagram or Facebook, Days asked you to share as many photos as possible, mundane or otherwise.
To help usher in this type of behavior, Days didn’t allow photo imports, as they wanted users to share pictures the same way they take them, which is a lot. Today, however, the app is updating with a new feature: photo imports.
But it’s not like most other photo-sharing apps, where you simply choose the photos you want to upload from your camera roll. Instead, you turn on photo import once and Days automatically begins uploading every photo you take.
Founder Jeremy Fisher believes that you should share almost everything, and delete the bits you don’t want. This goes against the grain of most of our behavior, which is to take far too many photos in the camera roll, and select only the choice bits to share.
However, the alternative must be a deterrent to Days usage.
I’ll explain. Days is an app that doesn’t aspire to real-time, selective photo-sharing. The idea, rather, is to share lots of photos in a collection, a Day. This day isn’t shared in real-time — users can choose to publish their day the day after. Fisher explains that it’s not about bits and pieces in real-time but about sharing a comprehensive story.
Fisher also wanted the content to be real, even if we might think of it as boring. Because it’s being shared as a story of your day, context makes seemingly mundane or boring photos interesting all of the sudden.
To accomplish this, Days originally didn’t allow photo import, to ensure that the content wasn’t edited or filtered. But to accomplish this feat, of having users share everything, Days asked users to take all of their photos in Days instead of the camera app. With swipe to camera from the lockscreen, as well as habit, this likely proved difficult.
Thus, the strategy has changed to auto-import everything from the camera roll into a draft. Days still has a task on its hands considering that there is already a dominant photo-sharing tool on the market in Instagram and that it has taught users to share worthwhile photos instead of every little detail.
Still, the new photo import feature should help quite a bit.
To check out Days, head on over to the App Store and download for free.